postrevolutionary state regulatory apparatus, most legal importing of
commodities must now go through a bureaucratic maze that requires time-
consuming recourse to a number of ministries, quasi-state organizations,
banks, and customs ofÔ¬Āces increasingly relocated away from central
Tehran.168 Thus, the active bazaaris spend much of their time in these
government ofÔ¬Āces, rather than in the Bazaar. It is not unusual for importers
and wholesalers to spend their mornings or a few days of the week away from
their stores and ofÔ¬Āces in the Bazaar.
Finally, the free trade zones, special economic zones, and border
markets have created new areas of trade beyond both the Bazaar and the
ministries located in Tehran. These peripheral zones have attracted
entrepreneurial and mercantile capital and in the process trade Ô¬‚ows are
increasingly centered around in the Gulf Region.169 In 2002 a study
estimated that there were Ô¬Āfteen legal, illegal, and quasi-legal ways of
importing goods into Iran.170 Of these, seven involved locations far from
the Tehran Bazaar, such as three different free trade zones, roughly Ô¬Āfty
border markets, border cooperatives, twenty specially protected regions,
speedboats across the Persian Gulf, import using allowances given to
Iranians working abroad, and import using passenger allowances. The
article identiÔ¬Āes the Ô¬Ārst three locations as the most important and
common method of importing ‚Ä“ all of these are locations quite far from
the Tehran Bazaar.
As already discussed, this preeminence of off‚Ä“shore import‚Ä“export
operations has relocated and dispersed the levels of the value chain so
that importers, wholesalers, and retailers are no longer consolidated in
the Bazaar. Trading companies in Dubai are the principal private
importers, with a few merchants in Tehran reduced to dependent cli-
ents. Moreover, large-scale wholesaling operations have shifted to the
ports in the southern Gulf. The vast majority of merchants I interviewed
in the Persian Gulf ports and free trade zones were from outside of the
region and from Isfahan, Shiraz, Tehran, Abadan, and Ahvaz.171 These
wholesalers explained that they had moved their operations or opened
up branches in the early 1990s when trade in the Gulf began to boom
and was legitimated by state trade policies. The whole range of tech-
nological and Ô¬Ānancial innovations have reduced transaction costs; for

example, frequent and inexpensive Ô¬‚ights to these regions allow many
middlemen and businessmen to spend their time in these border regions
rather than in the bazaars in central Iran. State policies, therefore, have
facilitated and mediated the process of globalization and regionalization
in the Persian Gulf.
Thus, Tehran and the Tehran Bazaar are no longer Iran‚Ä™s primary
commercial locations. ‚Ä˜‚Ä˜Before the Islamic revolution in Iran, Tehran
was the major headquarters location for international companies oper-
ating in the region and was the only regional transport hub. Since the
outset of the 1980s however, Dubai has replaced Tehran as the major
regional transport hub.‚Ä™‚Ä™172 In the process commercial exchanges have
become less face-to-face and intertwined with a particular physical space
or the milieu of the Tehran Bazaar.
At the level of national trade, the relocating of the networks has
undermined the Tehran Bazaar‚Ä™s focal position. Many retailers in
southern Iran are no longer part of the Tehran-based commercial net-
work. Instead, they purchase their goods directly from these new cross-
border commercial networks. Enterprises in Shiraz have redirected their
trade channels south and west to the Persian Gulf ports (Bushehr and
Bandar ‚Ä˜Abbas), those in Kerman look east and south to the Pakistani
border region (Chabahar and Zahedan), and Tabrizi traders eye the
northern and western borders with Turkey and Azerbaijan. These are in
a sense a revitalization of historic patterns of socioeconomic relations,
ones that predate the modern creation of a centralized (overly cen-
tralized) nation-state in Tehran.
In the context of government policymakers‚Ä™ desire to restructure
Iran‚Ä™s economy and Tehran‚Ä™s urban space, entrepreneurial capital has
been searching for new and unbounded places ‚Ä“ on the outskirts of the
city, in Iran‚Ä™s border region, and internationally. The upshot of this
reshaping of the physical setting of commerce was incremental, but
fantastic. In the words of one businessman, ‚Ä˜‚Ä˜Distribution of goods is
like a funnel. Whereas the head of the cone used to be in the Tehran
Bazaar and the funnel distributed goods out through the rest of the
country, now there are a whole series of cones and none of them begins
in the Tehran bazaar.‚Ä™‚Ä™ Goods today travel through a value chain that
begins with importers in Dubai, extends to wholesalers in border mar-
kets and free trade zones, and traverses most of Iran before the goods
make their way to a myriad wholesaler and retailer operations in Tehran,
the Bazaar being only one of these. Commercial activities take place as
much outside Tehran as they do within the Bazaar; cell phones and fax

machines sending messages from ofÔ¬Āces across long distances becoming
as much increasingly the means for negotiating agreements as con-
versations over cups of tea in storefronts or the opium brazier in homes.
These exchanges, while still based on personal relations, are set across
several locations that typically do not lend themselves to crosscutting
ties or multifaceted relations. The delocalization of networks away from
the physical setting of the Tehran Bazaar undermines the internal reg-
ulatory apparatus that ensured identiÔ¬Ācation of trustworthy traders and
social deviants. Today the trustworthy remain private knowledge and
the untrustworthy hide as secret deviants.

Conclusions
In her treatment of the political economy of a popular quarter in central
Cairo, Diane Singerman shows how informal networks ‚Ä˜‚Ä˜organize,
coordinate, and direct individual actions. In short, they aggregate the
interests of the Sha‚Ä™b [the popular classes]. Networks are a concrete
manifestation of extrasystemic political participation not controlled by
formal political institutions or the political elite.‚Ä™‚Ä™173 This interpretation
of networks is consistent with the role of bazaari networks under the
Pahlavi monarchy and the smuggling networks under the Islamic
Republic, wherein the logic of network creation and participation was
the construction through manipulation and evasion of state institutions
of an alternative to the state‚Ä™s social order. In the former case, the
networks were a response to a formal system that consciously neglected
and excluded the existing Bazaar; in the latter case, the networks have
been a rejoinder to an institutional setting that attempts to control all
commercial activities in order to redistribute them via personalistic
patronage. However, by concentrating on the ‚Ä˜‚Ä˜extrasystemic‚Ä™‚Ä™ nature of
networks, there is a tendency to gloss over the ‚Ä˜‚Ä˜systemic‚Ä™‚Ä™ and ‚Ä˜‚Ä˜formal
political institutions‚Ä™‚Ä™ that I have attempted to show are crucial para-
meters in the formation of new networks and the shaping of existing
ones. In order to rule, regimes create a prism of institutions and orga-
nizations that not only conÔ¬Āgure state‚Ä“society relations, but also have an
impact on the aggregation of interests within social groups.
For the internal organization of the Tehran Bazaar, the demise of the
Pahlavi monarchy and the ascendancy of the Islamic Republic meant a
recasting of the institutional and physical settings of commercial net-
works, leading to a shift from cooperative to coercive hierarchies. Under

the current regime, networks continue to play a critical role in inÔ¬‚uen-
cing economic outcomes. In fact, they have become more essential as
large-scale commercial activities have become limited to those with
special ties to exclusive sites of trade. Consequently, those in the net-
work have more dependency relations and those who do not have these
exclusive relations are forced to be involved in illegal activities that tie
bazaaris to speculators and off-shore actors. Without close-knit and
integrative ties, coercive hierarchies entrench social discord and
heighten cleavages that inhibit aggregation of interests and the creation
of a sense of community.
This reformulation of relations within the Tehran Bazaar is an
accretion of actions and reactions by state agents and bazaaris. In
Chapter 3, I illustrated how actions were embedded in networks. The
present chapter has focused on how networks themselves are embedded
in polities and economies. This double embedding is the catalyst that
makes networks the medium through which polices are translated into
actions. Regimes wielding the state‚Ä™s ‚Ä˜‚Ä˜infrastructural powers‚Ä™‚Ä™174 have a
privileged role in setting the stage for networks by creating actors and
regulating types of relations. Formal institutions (with emphasis here
placed on their plurality) reÔ¬‚ect the preferences, tastes, and compro-
mises of state elites and impact the governance of the Bazaar by
demarcating the types and scope of bazaari relations. Even so, social
groups negotiate these forays by state actors by resorting to their indi-
vidual initiatives and social endowments. The combination of different
policies and resistance to them over time led to outcomes that were
unplanned or unforeseen by the political elite. Rather than replacing the
Tehran Bazaar, the Shah‚Ä™s modernist vision allowed for the conditions
through which the Tehran Bazaar governed itself, developed a corporate
identity, and eventually mobilized in support of the revolution that
overthrew him. In the subsequent two decades, the Islamic Republic
spoke of a ‚Ä˜‚Ä˜committed and devout‚Ä™‚Ä™ Bazaar, but Islamic populism
brought about a highly disunited and disenchanted marketplace.

Despite the variety of goods traded in the Tehran Bazaar, its large
number of shops, its expansive physical size, and disparities in wealth
among bazaaris, the Bazaar is generally treated as a single unit. Looking
back to the nineteenth and early twentieth centuries, this treatment may
be reasonable. There was less specialization and lower levels of capital
accumulation among the bourgeoisie. The historical weakness of guilds,
a weakness measured in terms of independence from the state and
capacity to set prices and control entry and exit,1 also limited sectoral
cleavages. In the late Pahlavi era, we saw that a corporate identity was
generated by the crosscutting and multifaceted relations that often
bridged sectoral, ethnic, and class lines to create a corporate entity.
However, this conceptualization masks underlying sectoral distinctions
in larger marketplaces such as Tehran‚Ä™s, sectoral variations that reÔ¬Āne
our analysis of the Bazaar‚Ä™s internal governance and state‚Ä“bazaar rela-
tions. In particular, this chapter considers the consequence of group
size, ethnic composition, relations to the world economy, modalities of
geography and economic development, and state regulations under the
imperial and revolutionary regimes.
This chapter investigates the hand-woven carpet, tea, and china and
glassware sectors in the Tehran Bazaar under the Pahlavi monarchy and
Islamic Republic to assess the socioeconomic factors and speciÔ¬Āc state
institutions and development agendas that may have molded their forms
of governance. The differences in these bazaars are noteworthy. While
the carpet bazaar in Tehran was principally an export sector, until
recently, the china and glassware bazaar predominantly dealt in imports.
Meanwhile, both domestic and imported teas has been traded in the tea
bazaar. These different types of trade allow us to look at how various
state institutions and macroeconomic policies have inÔ¬‚uenced these
diverse sectors.

I show that all three sectors followed the same general shift
from cooperative to coercive hierarchies and that the Bazaar- and
regime-level transformations discussed earlier were instrumental in
these transformations. Yet these sectors vary along certain dimensions
that inÔ¬‚uenced their trajectories to coercive hierarchies. As a market for
nonstandard goods, the carpet sector is an opportunity to study the
particular institutions that emerge when information is costly. Also, as
carpets are exported, we assess the changes in the export regime and the
world economy. The analysis of the tea bazaar focuses on two different
state regulatory systems meant to protect domestic production. As a
purveyor of manufactured goods, the china and glassware sector allows
us to ponder the particularities of standard goods and the Bazaar‚Ä™s
relationship with an emerging domestic industry. To foreshadow the
analysis, the comparisons suggest that group size, geographical disper-
sion of trade networks, and the mere existence or absence of state reg-
ulation do not affect the form of governance as more individualistic
views of markets would predict. Meanwhile commodity types that are
nonstandard play an intermediary role in shaping commercial relations,
by encouraging localization and particular internal institutions (i.e. cli-
entelization, brokerage, and specialization) conducive to cooperative
hierarchies.
This chapter is organized as follows. I will Ô¬Ārst describe the evolution
of the individual sectors to show how they all followed the basic path
from cooperative to coercive hierarchies. I will highlight how speciÔ¬Āc
state policies and market developments led to these outcomes. Based on
these three narratives, I next investigate the socioeconomic aspects not
directly considered in the state‚Ä“society framework presented in the
preceding chapters. In particular, I ponder the effects of group size,
geographical dispersion of trade networks, commodity type, and state
regulation of these particular sectors.

The carpet bazaar
A carpet seller must have the patience of Job, the wealth of Croesus, and the
lifespan of Noah.
Proverb

A carpet seller who owned a store outside of the Tehran Bazaar told me
that the carpet merchants in the Bazaar controlled the entire market.
When I asked him why that was the case, he answered, ‚Ä˜‚Ä˜Because carpets
always look better under the domed roofs of the Bazaar.‚Ä™‚Ä™ He could not,
or would not, elaborate further. I mentioned this to a few carpet dealers
who worked within the Bazaar, and they explained that the real reason
Carpets, tea, and teacups 189

the Bazaar is such an ideal place for the carpet trade is that it is where the
‚Ä˜‚Ä˜experts,‚Ä™‚Ä™ ‚Ä˜‚Ä˜old-timers,‚Ä™‚Ä™ and ‚Ä˜‚Ä˜the experienced ones‚Ä™‚Ä™ are based. They